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Court overturns $2.2M judgment in YC case over ski access

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HELENA (AP) – The Montana Supreme Court has overturned a $2.2 million award granted to a corporation that bought a house at the exclusive Yellowstone Club but didn’t receive the ski-out access it was promised.

Continental Partners bought land from Yellowstone Development in 2004 and built two houses. WLW Realty Partners purchased one that was under construction for $12 million. Continental said Yellowstone Development assured the house would have a ski-in and gravity ski-out access before construction was complete.

The Yellowstone Club filed for bankruptcy in November 2008 and the ski-out access was not built.

WLW filed a claim in the Yellowstone Club’s bankruptcy case for $225,000, the cost of building a towline to replace the ski-out access. The court allowed that claim.

Then WLW sued Continental Partners alleging breach of contract, negligent misrepresentation and violation of the Montana Consumer Protection Act.

District Judge Loren Tucker ruled against WLW on the breach of contract case, but in favor of WLW on the other two.

In Continental’s appeal, the Supreme Court found that to obtain a verdict in a negligent misrepresentation case it must be proven that the defendant made an untrue representation. In this case, the court said Continental was saying the ski-out access would be built in the future, and they believed that promise to be true at the time.

“Continental was prevented from enforcing its contractual right because the Yellowstone Club filed for bankruptcy protection,” the court wrote in a 5-0 ruling issued Tuesday. The events that led to the Yellowstone Club’s bankruptcy “were unknown and unknowable to Continental at the time of its representation to WLW Realty, and were completely outside of Continental’s control.”

Justices also rejected the $232,000 awarded for violating the Montana Consumer Protection Act, again because Continental believed that at the time it sold the house, the ski-out access would be built.

The court sent the case back to Tucker to enter a judgment in favor of Continental.

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